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USD/JPY trades steadily after Chinese manufacturing PMI report

Dollar-yen1US dollar was trading steadily against the Japanese yen on Thursday, after a report said that Chinese manufacturing PMI climbed at the fastest pace in seven months in October, which dimmed demand for safe haven currencies, such as the yen.

USD/JPY reached a session high at 97.61 at 5:50 GMT, after which consolidation followed at 97.41, inching up 0.02% for the day. Support was likely to be found at October 23rd low, 97.15, while resistance was to be encountered at psychological level of 98.00.

According to data by HSBC released earlier, the preliminary value of the Chinese manufacturing PMI came in at 50.9 in October, reaching its highest point in seven months. The final value of this index stood at 50.2 in September, below the flash value of 51.2. Experts had projected that the index will advance to 50.5. The reading suggested that Chinese economic recovery was becoming consolidated in the final quarter of the year, while gained momentum was likely to continue during the upcoming months, as this may provide appropriate conditions for accelerating structural reforms.

The above mentioned data eased to a certain extent concerns over economic development in the country, after yesterday market sentiment was influenced by speculation that the Chinese central bank would tighten its monetary policy to curb inflation rate. Consequently, risk appetite was bolstered and demand for safe haven currencies, such as the yen, respectively decreased.

However, the US dollar was still under pressure after the disappointing US non-farm payrolls report, released on Tuesday, and in expectation of the vital series of economic data out of the United States, scheduled to be published later in the day, including initial jobless claims, trade balance, new home sales and the flash value of the manufacturing PMI.

Meanwhile, the Japanese yen was lower against the euro, as EUR/JPY pair rose 0.08% to trade at 134.28 at 8:26 GMT. It became clear that Spains unemployment rate slightly decreased in Q3, falling for a second quarter in a row, as hiring during the summer period remained stable. Unemployment in the country slipped to 25.98% to reach 5.9 million people during the third quarter of the year from 26.26%, registered during the previous quarter. Yesterday the Spanish central bank said it projected that nations economic growth will rise 0.1% during Q3 and this would mark the end of the two-year recessionary period, which led to the record rate of unemployment.

In addition, GBP/JPY cross was advancing 0.15% on a daily basis to trade at 157.67 at 8:26 GMT. Later on trading Thursday the Confederation of British Industry was to release a report on industrial orders in the United Kingdom.

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